Source- ICAI CS Digest ( International Tax- 6C)
CS- 18; MCQ No 3
Chapter XII states that if TDS deducted at a rate lower than 10% iro royalty/ FTS( approved by CG), by availing beneficial provisions of DTAA, then no exemption from return filing. But in above scenario, although DTAA benefit availed by claiming 10% tax rate( MCQ No 2), but not lower than 10%. Hence exemption from return filing can be availed, whether tax is paid as per Income Tax Act( 10.92%- MCQ No 1) or DTAA.
But ans to above MCQ is option (c). Pls explain the reason behind the same.
I haven’t taken International Taxation for Elective but the cases where NR is taking benefit of DTAA he should file the return of Income otherwise how will the authority understand what he has availed exemption in .
Now coming to part where TDS is not deducted at a lower rate but higher rate there are only certain cases where if TDS is deducted like in Case of Income from Business Trust , Dividend , INVESTMENT ENTITY, SPv where if the income is earned since the income is already deducted so the they are not required to File return of income